Cablegate: Wto Hong Kong Ministerial: Industries Publicly

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS OTTAWA 003586

SIPDIS

STATE FOR EB/TPP/BTA, EB/TPP/BTA/EWH AND EB/TPP/MTA

WHA/CAN - BREESE AND HOLST AND E - U/S SHINER

STATE PLEASE ALSO PASS TO USDA

DEPT PASS USTR FOR MELLE AND CHANDLER

USDOC FOR 4322/ITA/MAC/WH

E.O. 12958: N/A
TAGS: ECON ETRD EAGR CA WTRO
SUBJECT: WTO HONG KONG MINISTERIAL: INDUSTRIES PUBLICLY
LOBBY PRIME MINISTER ON AGRICULTURE

REF: OTTAWA 3519

1. Reftel reported a joint press availability at which trade
ministers from the GOC and the provinces of Ontario and
Quebec vowed to defend Canada's agricultural "supply
management" system at the WTO. In subsequent days, the
House of Commons unanimously passed a motion supporting
supply management, which prompted various farm and business
groups to address public letters to Prime Minister Paul
Martin criticizing the motion or (in the case of dairy, egg
and poultry farmers who benefit from the system) supporting
supply management.

-- Canada's two leading big-business lobbies, the Canadian
Council of Chief Executives and the Canadian Chamber of
Commerce, separately wrote to protest the House of Commons
motion. The CCCE said it "threatens to move Canada from
being part of the solution to the current impasse to being
part of the problem." The CCC said the motion "would
totally marginalize Canada in the agriculture discussions"
and "is a contradiction to the already agreed upon WTO
Framework that Canada supported."

-- A large coalition of agricultural and food industries
wrote to PM Martin on November 30, also to protest the House
of Commons motion. This letter said that the negotiating
mandate implied by the motion would "remove Canada's
agriculture negotiators from agriculture market access
negotiations" and "would also likely exclude them from
negotiations on export competition and subsidies." "A
mandate like this would also send a clear message to the
rest of the world . . . that Canada no longer supports the
overall goal of the World Trade Organization."

-- An opposing coalition of dairy, poultry and egg farmers
placed prominent newspaper ads on December 1 calling on the
negotiating team to "promote" supply management because it
"simply makes more sense than the U.S.-style alternative."

2. MOTION: The motion, proposed by two Quebec members and
passed unanimously by the House of Commons on November 22,
urges the GOC to "ensure that the supply management sectors
are subject to no reduction in over-quota tariffs and no
increase in tariff quotas, and also ensure an agreement that
strengthens the market access position of Canada's
agricultural exporters so that all sectors can continue to
provide producers with a fair and equitable income."

3. BACKGROUND: "Supply management," which developed in the
1960's and 1970's, uses a combination of production quotas
and tariff rate quotas to manage the domestic supply of
dairy, egg and poultry products. Farmers who are protected
by this system are concentrated in the central provinces
where the Liberal government is based (particularly Ontario)
and faces its toughest fight in the coming January 23
national election (particularly Quebec). Production quotas
have appreciated greatly in market value over time, making
the farmers in these sectors -- notably Quebec's dairy
industry -- a formidable lobby. Canada's grain and cattle
farmers, who are concentrated in the western provinces, are
much more interested in trade liberalization efforts and are
also more likely to be represented by the opposition
Conservative Party. This regional division lends an
important national-unity sensitivity to Canada's WTO
positions.

WILKINS

© Scoop Media